Student Loan Forgiveness

[MultiVerse]

The question isn’t are there better plans (better being very subjective), the question is what can Biden do unilaterally with half of the Senate against any action that will make Biden look good to voters. Out of his options, this is one of the better ones. Nobody says it’s perfect, but to pretend like this isn’t going to help millions of people is just false.

I've already said this is good politics. That doesn't make it good policy.

The Jason Furman interview, the Harvard economist, Democrat and former Obama economic adviser, speaks directly to the issue about who this plan helps and why that's a problem.

[Supermoon]

I've already said this is good politics. That doesn't make it good policy.

That article you linked above is just the same as everyone else arguing about the income limit, and worrying about inflation, but 1) again, there have been no payments for two years. The inflation is baked in. If anything, resuming payments will have a slightly negative effect on inflation. 2) assuming that people who make $124k per year are some rich muckity mucks is just plain false when you look at the cost to live in majorly (and minor) metro areas. 3) all the people claiming moral hazard got their colleges subsidized by the state in ways modern kids don’t. Think of it like a $2,500/year subsidy. That pales in comparison to how much of college boomers got paid for.

[Supermoon]

But you don’t want to hear any of that you just want to bitch, so carry on

[MultiVerse]

What do you mean I don’t want to hear any of that? Most of your arguments are similar to my arguments:

- According to Jason Furman resuming payments will lower inflation by a tenth of a percentage point and by the same token increase it by roughly the same amount. So the added cost of this plan in terms of inflation for every American is $200 dollars a year in the current environment.

- Call it moral hazard or whatever, I think we're in agreement that this will contribute to making the problem worse for students in the future.

- Nobody is saying $124k is equivalent to a rich muckity muck. This plan does give couples making up to $250,000, which is a lot of money, up to $40,000. Even then it's more about lifetime earnings. Is providing relief to the tune of somewhere between $300 billion to $1 trillion for high lifetime wage earners a good idea?

[Supermoon]

What do you mean I don’t want to hear any of that? Most of your arguments are similar to my arguments:

- According to Jason Furman resuming payments will lower inflation by a tenth of a percentage point and by the same token increase it by roughly the same amount. So the added cost in terms of inflation for every American is $200 dollars a year in the current environment.

- Call it moral hazard or whatever, I think we're in agreement that this will contribute to making the problem worse for students in the future.

- Nobody is saying $124k is equivalent to a rich muckity muck. This plan gives couples making up to $250,000, which is a lot of money, up to $40,000. Even then it's more about lifetime earnings. Is providing relief to the tune of somewhere between $300 billion to $1 trillion for high lifetime wage earners a good idea?

We are absolutely not in agreement about it making it worse in the future for students. I think it will have no impact either way.

Also, to get $40k you’d have to be two Pell grant recipients, who have become very successful in life. Why punish them? Also, 90% of the money goes to people making $75k or less I believe. So it’s a weird edge case/straw man argument. Even if it’s “wasteful” or whatever, I’d rather it go to successful college grads who have made a generational jump in class status than some oil company or military contractor.

Finally, this isn’t about long term earnings, it’s about immediate relief in the face of a pandemic, inflation and looming recession.

This will be the third recession of my 15 year career, so a little help wiping out the rest of my loans is going to be really nice.

[MultiVerse]

- By inference, your argument that past subsidies create moral hazard means present subsidies also create moral hazard. FWIW, this isn't moral hazard per se, it's worse, it's colleges extracting whatever they can from the system.

- There are already forms of college debt relief for lower-income people. If folks think we should do more then lower the income limits of the new plan.

- Right now the job market is as good as it has ever been for college grads.

- Yeah, the oil company or military contractor versus another group of high wage earners speaks to the crux of the matter. Everybody knows Republicans unapologetically give public funds to the well-off. This is essentially the same thing. It's certainly not progressive or liberal policy which begs the question what does it mean to be a Democrat?

[Mustonen]

I kind of enjoy the idea that posting opinion pieces that agree with your argument counts as “well sourced evidence.”

In any event, you haven’t provided much to support that forgiving 10k/20k of past debt is gonna be the thing to drive up tuition. You’re the one making the contention, and I’d suggest that means you carry the burden of proof. “Bad policy?” In the pursuit of what?

It’s not so just cuz you say it’s so. No matter how many times you say it. This isn’t some opposing viewpoint I’m presenting. I’m not the one making some tenuous argument about the ultimate impact of this on…. Anything. You’re drawing a connection between this specific action and rising tuition costs without presenting evidence or a cogent argument for why. I have limited interest or attention-span for continuing to engage on this, the most interesting part is your dogged defense of a manufactured reality, but as long as there are commercials in this football game and my beer glass isn’t empty, here we are I guess.

Go on now, post something inane and support it with nothing and then edit your response 72 times.

[MultiVerse]

Jason Furman is a PhD Harvard economist. His opinion is informed by decades of study and research. I've also posted links to several academic papers in this thread so there's plenty of 'support' both here and elsewhere. The fact is you chose to lalalalala fingers in your ears, ignore it ¯\_(ツ)_/¯ .

[Supermoon]

- By inference, your argument that past subsidies create moral hazard means present subsidies also create moral hazard. FWIW, this isn't moral hazard per se, it's worse, it's colleges extracting whatever they can from the system.

- There are already forms of college debt relief for lower-income people. If folks think we should do more then lower the income limits of the new plan.

- Right now the job market is as good as it has ever been for college grads.

- Yeah, the oil company or military contractor versus another group of high wage earners speaks to the crux of the matter. Everybody knows Republicans unapologetically give public funds to the well-off. This is essentially the same thing. It's certainly not progressive or liberal policy which begs the question what does it mean to be a Democrat?

You keep saying that I agree with things I don't. I think past and present subsidies for higher ed are good things. I think there should be more! It's the opposite of moral hazard. It's a societal benefit to have a more educate populace, and there are other benefits to college beyond just education.

Also, there is a huge difference between a couple that makes $249k per year, and a giant oil company. They are not even close to the same thing. You seem to focus your hate on the small percentage of people who benefit that you don't think deserve it while ignoring the vast majority of those that will benefit.

[MultiVerse]

Now we're just circling around the same old discussion. The subsidies aren't necessarily going towards education, but are instead increasingly (~70%) going towards the salaries of highly paid college administrators.

Also, there's zero hate. I applaud success. I'm a successful person myself. I'm simply making what are essentially analytical arguments.

[Mustonen]

Jason Furman is a PhD Harvard economist. His opinion is informed by decades of study and research. I've also posted links to several academic papers in this thread so there's plenty of 'support' both here and elsewhere. The fact is you chose to lalalalala fingers in your ears, ignore it ¯\_(ツ)_/¯ .

He makes a passing conjecture that this might raise tuition, but provides no evidence and with a cursory, though well meaning and intentioned search, it isn’t something that anybody (including him) is taking seriously. So why is it the core of your contention?

[MultiVerse]

It's not a so called 'passing conjecture,' he's simply describing grounded economics to a lay audience. And didn't you say you don't care regardless? ¯\_(ツ)_/¯

[Mustonen]

It's not a so called 'passing conjecture,' he's simply describing grounded economics to a lay audience.

Oh sure. Because you say it’s not a passing conjecture it isn’t.

Thanks so much for that.

Please tell us more things and help us make sense of this confusing world we are in.

[Mustonen]

It's not a so called 'passing conjecture,' he's simply describing grounded economics to a lay audience. And didn't you said you donn't care anyway?

Just grabbing this edit.

[Mustonen]

It's not a so called 'passing conjecture,' he's simply describing grounded economics to a lay audience. And didn't you say you don't care regardless?

Regardless is a much better word. Well done.

[Mustonen]

It's not a so called 'passing conjecture,' he's simply describing grounded economics to a lay audience. And didn't you say you don't care regardless? ¯\_(ツ)_/¯

Oh SHIT! The ASCII shrug really drives it home.

[summit]

Just grabbing this edit.

C'mon that is hardly a vindicating debate tactic

[MultiVerse]

What's wrong with editing? Is Mustonen vying for a position as forum police?

Oh sure. Because you say it’s not a passing conjecture it isn’t.

From the Brookings Institute: Student loan forgiveness is regressive whether measured by income, education, or wealth. Why only targeted debt relief policies can reduce injustices in student loans

Medical school graduates typically owe six-figure student loans but that doesn’t mean they are poorer than high-school graduates who did not go to college. Wealth, properly measured, should include the value of educational investments students borrowed to make. Measured appropriately, student debt is concentrated among high-wealth households and loan forgiveness is regressive whether measured by income, educational attainment, or wealth. Across-the-board forgiveness is therefore a costly and ineffective way to reduce economic gaps by race or socioeconomic status.

…Accounting correctly for both human capital and effect of subsidies in student lending plans, almost a third of all student debt is owed by the wealthiest 20 percent of households and only 8 percent by the bottom 20 percent. Across-the-board student loan forgiveness is regressive measured by income, family affluence, educational attainment—and also wealth.

[Mustonen]

No, Summit, that was good. Why the delete?

It’s hard to maintain a dialog when somebody changes every post 17 times after you’ve already responded. It’s ridiculous. Also, though, it’s funny.

And this isn’t truly a debate, in my mind, since it seems to be grounded in “this is so because I said it’s so, also, I posted evidence and this guy said a similar thing one time.” And that’s barely interesting. More interesting than that fucking liberty mutual bird thing. Emu.

[Mustonen]

What's wrong with editing? Is Mustonen vying for a position as forum police?



From the Brookings Institute: Student loan forgiveness is regressive whether measured by income, education, or wealth. Why only targeted debt relief policies can reduce injustices in student loans

Medical school graduates typically owe six-figure student loans but that doesn’t mean they are poorer than high-school graduates who did not go to college. Wealth, properly measured, should include the value of educational investments students borrowed to make. Measured appropriately, student debt is concentrated among high-wealth households and loan forgiveness is regressive whether measured by income, educational attainment, or wealth. Across-the-board forgiveness is therefore a costly and ineffective way to reduce economic gaps by race or socioeconomic status.

…Accounting correctly for both human capital and effect of subsidies in student lending plans, almost a third of all student debt is owed by the wealthiest 20 percent of households and only 8 percent by the bottom 20 percent. Across-the-board student loan forgiveness is regressive measured by income, family affluence, educational attainment—and also wealth.

See? That’s bananas. I come back and the reply to my post literally grew five-fold. If you have new shit to say, make a new post, ya putz.

And I forget where we were arguing that this isn’t regressive. That’s a different thing than what we’re talking about. You are fixated on this being a handout to college administrators and making college tuition more unaffordable, to which I respond: what? Show your work plz. And you do so by talking about it being regressive. Which is more interesting and I don’t disagree with you, but of all the regressive policies out there, I’m not sure this is the particular mountain I’d die on.

[MultiVerse]

It's all of a piece, Mustonen. These issues are all related and your attempts to reduce them to absurdities is weak-minded. Now go make me a sandwich, and while you're at it think about how you're not the boss of me.

That’s a different thing than what we’re talking about.

It begs the question of whether increased Federal aid has the desired effect of improving college affordability? Owing to the vast expansions in federal student aid in recent decades in sync with escalating tuition costs and the subsequent student debt crisis, there is a growing strand of economic literature examining the relationship between federal aid and tuition prices. Research shows that increased federal aid is responsible for more than doubling the cost of tuition over a two decade period (significantly more than any other factor).

[Mustonen]

It's all of a piece, Mustonen. These issues are all related and your attempts to reduce them to absurdities is weak-minded. Now go make me a sandwich, and while you're at it think about how you're not the boss of me.

Uh, sure? Make you a sandwich?

I think upthread we hammered out the regressive argument, and up there I believe those supporting the forgiveness left it at: data indicate it does indeed help those we’re trying to target, it benefits the middle class, and that it’s ok if some things benefit the middle class especially if it also benefits the lower class, as this does.

[MultiVerse]

In response, see the linked academic literature survey in the edit above. TLDR: federal aid is the most significant factor in rising college costs.

[Supermoon]

That's a policy brief, not a peer reviewed study. Their argument that too many loans default is an argument FOR loan forgiveness.

All of this ignores that overall student borrowing peaked sometime in the last decade, so the continuing increase in costs is clearly NOT driven by increases in borrowing.

[MultiVerse]

It's an academic literature survey. Student borrowing peaked in the aftermath financial crisis. Increasing costs are, among other things, mostly driven by borrowing.